Wednesday, September 24, 2008

Washington Times reported In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other "troubled" assets held by banks.

This is absolute stupidity. The government has no business bailing out people that took out a mortgage they cannot pay for, or the bank that was stupid enough to loan them the money, or any other financial institution that was stupid enough to buy that loan. And it is even stupider to expand it to include student loans, car loans, credit card debt and any other "troubled" assets held by banks. If you took out a loan you were not going to be able to pay off, you committed fraud, and you should be punished for it. If you are a bank that was stupid enough to loan money to someone that was not going to be able to pay it back, this is a learning experience, and what you lost is the price of that education. And if you realized the person was not going to be able to pay it off, and you sold that loan to some other financial institution, and did not tell them it would not be paid off, then you committed fraud, and should be punished. And for the financial institution that was stupid enough to buy the loan, this is a learning experience, and what you lost is the price of that education. It is not the government's job to either bail people or banks out of their mistakes, or to pay for their learning experiences.

The changes, which were included in draft language that also opened the bailout program to foreign banks with extensive loan operations in the United States, potentially added tens of billions of dollars to the cost of the program.